Question 1

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Accepted Answer

A)   better off regardless of how Colombia responds.
B)   better off if Colombia removes the subsidies, and will be no worse off if it doesn't.
C)   worse off if Colombia doesn't remove the subsidies in response to the threat.
D)   worse off regardless of how Colombia responds.E) B) and D)
F) All of the above

Question 2

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. 
-Refer to Figure 9-8. In the country for which the figure is drawn, total surplus with international trade in cars

Accepted Answer

A)   is represented by the area A + B + C.
B)   is represented by the area A + B + D.
C)   is smaller than producer surplus without international trade in cars.
D)   is larger than total surplus without international trade in cars.E) None of the above
F) C) and D)

Question 3

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat, the nation began importing wheat. As a result, total surplus in the wheat market increased by $10 million. Which of the following changes could have occurred as well?

Accepted Answer

A)   The price of wheat in that nation increased with the adoption of the new policy.
B)   The domestic quantity of wheat supplied increased with the adoption of the new policy.
C)   Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million.
D)   Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.E) A) and B)
F) A) and C)

Question 4

Figure 9-6
The figure illustrates the market for roses in a country. 
-Refer to Figure 9-6. The imposition of a tariff on roses

Accepted Answer

A)   increases the number of roses imported by 100.
B)   increases the number of roses imported by 200.
C)   decreases the number of roses imported by 200.
D)   decreases the number of roses imported by 400.E) B) and C)
F) A) and C)

Question 5

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. 
-Refer to Figure 9-14. A result of this country allowing international trade in crude oil is as follows:

Accepted Answer

A)   The well-being of domestic crude-oil producers is now higher in that they now sell more crude oil at a higher price per barrel.
B)   The effect on the well-being of domestic crude-oil consumers is unclear in that they now buy more crude oil, but at a higher price per barrel.
C)   The effect on the well-being of the country is unclear in that domestic producer surplus increases, while the effect on domestic consumer surplus is unclear.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 6

When a country allows international trade and becomes an exporter of a good,

Accepted Answer

A)   domestic producers of the good become better off.
B)   domestic consumers of the good become worse off.
C)   the gains of the winners exceed the losses of the losers.
D)   All of the above are correct.E) B) and D)
F) None of the above

Question 7

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Accepted Answer

A)   the quantity of wine demanded by France, with the tariff, is 18 million bottles per year.
B)   the quantity of wine demanded by France, without the tariff, would be 24 million bottles per year.
C)   the amount of the deadweight loss is 24 million euros per year.
D)   the tariff causes French buyers of wine to pay 2 euros more per bottle than they would pay without the tariff.E) A) and D)
F) None of the above

Question 8

Figure 9-2
The figure illustrates the market for calculators in a country. 
-Refer to Figure 9-2. With free trade, consumer surplus is

Accepted Answer

A)   $320.
B)   $640.
C)   $845.
D)   $1,690.E) None of the above
F) A) and D)

Question 9

Figure 9-5
The figure illustrates the market for tricycles in a country. 
-Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Accepted Answer

A)   Incomes of domestic citizens increase, and tricycles are a normal good.
B)   Within this country, the price of a substitute for tricycles decreases.
C)   Within this country, the price of a complement to tricycles decreases.
D)   Wages increase for domestic workers who produce tricycles.E) A) and B)
F) B) and C)

Question 10

Tariffs and quotas are different in the sense that

Accepted Answer

A)   tariffs cause deadweight losses, while quotas do not cause deadweight losses.
B)   tariffs raise revenue for the government, while quotas do not raise revenue for the government.
C)   tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers.
D)   tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers.E) B) and C)
F) A) and C)

Question 11

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Accepted Answer

A) True 
 B)False

Question 12

Figure 9-3. The domestic country is China. 
-Refer to Figure 9-3. With trade, China will

Accepted Answer

A)   import 100 pencil sharpeners.
B)   import 250 pencil sharpeners.
C)   export 150 pencil sharpeners.
D)   export 250 pencil sharpeners.E) B) and C)
F) All of the above

Question 13

Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

Accepted Answer

A)   know whether Costa Rica imports or exports pharmaceuticals.
B)   compare the world price of pharmaceuticals to the price of pharmaceuticals that would prevail in Costa Rica if trade with the rest of the world were not allowed.
C)   compare the quantity of pharmaceuticals consumed in Costa Rica with the quantity of pharmaceuticals that would be consumed in Costa Rica if trade with the rest of the world were not allowed.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 14

For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should

Accepted Answer

A)   export copper.
B)   import copper.
C)   neither export nor import copper, since that country cannot gain from trade.
D)   neither export nor import copper, since that country already produces copper at a low cost compared to other countries.E) C) and D)
F) B) and D)

Question 15

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Accepted Answer

A)   confirmation of the virtues of free trade.
B)   confirmation of the infant-industry argument.
C)   confirmation that free trade agreements are not necessary.
D)   confirmation that specialization in absolute advantage works.E) C) and D)
F) B) and D)

Question 16

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 17

A country has a comparative advantage in a product if the world price is

Accepted Answer

A)   lower than that country's domestic price without trade.
B)   higher than that country's domestic price without trade.
C)   equal to that country's domestic price without trade.
D)   not subject to manipulation by organizations that govern international trade.E) A) and B)
F) B) and C)

Question 18

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Accepted Answer

A) True 
 B)False

Question 19

Figure 9-15 
-Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Accepted Answer

A)   B.
B)   E.
C)   D + F.
D)   B + D + E + F.E) A) and D)
F) None of the above

Question 20

Figure 9-12 
-Refer to Figure 9-12. Consumer surplus before trade is

Accepted Answer

A)   $14,400.
B)   $16,800.
C)   $21,600.
D)   $24,800.E) None of the above
F) All of the above

Exam 9: Application: International Trade

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, China will

Correct Answer
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Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

Correct Answer
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The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Correct Answer
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Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The imposition of a tariff on roses

Correct Answer
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If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Correct Answer
verified

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Correct Answer
verified

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Correct Answer
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When a country allows international trade and becomes an exporter of a good,

Correct Answer
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Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Correct Answer
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Tariffs and quotas are different in the sense that

Correct Answer
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Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

Correct Answer
verified

Correct Answer
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A country has a comparative advantage in a product if the world price is

Correct Answer
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Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Correct Answer
verified

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. A result of this country allowing international trade in crude oil is as follows:

Correct Answer
verified

For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should

Correct Answer
verified

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Correct Answer
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Figure 9-12 -Refer to Figure 9-12. Consumer surplus before trade is

Correct Answer
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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Correct Answer
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Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. In the country for which the figure is drawn, total surplus with international trade in cars

Correct Answer
verified

Exam 9: Application: International Trade

Figure 9-3. The domestic country is China. -Refer to Figure 9-3. With trade, China will

Correct AnswerverifiedShow Answer

Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

Correct AnswerverifiedShow Answer

The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive from participating in a market.

Correct AnswerverifiedShow Answer

Figure 9-6 The figure illustrates the market for roses in a country. -Refer to Figure 9-6. The imposition of a tariff on roses

Correct AnswerverifiedShow Answer

If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be

Correct AnswerverifiedShow Answer

Figure 9-15 -Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

Correct AnswerverifiedShow Answer

William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas.

Correct AnswerverifiedShow Answer

When a country allows international trade and becomes an exporter of a good,

Correct AnswerverifiedShow Answer

Free trade causes job losses in industries in which a country does not have a comparative advantage, but it also causes job gains in industries in which the country has a comparative advantage.

Correct AnswerverifiedShow Answer

Tariffs and quotas are different in the sense that

Correct AnswerverifiedShow Answer

Figure 9-2 The figure illustrates the market for calculators in a country. -Refer to Figure 9-2. With free trade, consumer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A country has a comparative advantage in a product if the world price is

Correct AnswerverifiedShow Answer

Economists view the fact that Florida grows oranges, Texas pumps oil, and California makes wine as

Correct AnswerverifiedShow Answer

Figure 9-14. On the diagram below, Q represents the quantity of crude oil and P represents the price of crude oil. -Refer to Figure 9-14. A result of this country allowing international trade in crude oil is as follows:

Correct AnswerverifiedShow Answer

For any country, if the world price of copper is lower than the domestic price of copper without trade, that country should

Correct AnswerverifiedShow Answer

Suppose France imposes a tariff on wine of 3 euros per bottle. If government revenue from the tariff amounts to 30 million euros per year and if the quantity of wine supplied by French wine producers, with the tariff, is 8 million bottles per year, then we can conclude that

Correct AnswerverifiedShow Answer

Figure 9-12 -Refer to Figure 9-12. Consumer surplus before trade is

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Figure 9-5 The figure illustrates the market for tricycles in a country. -Refer to Figure 9-5. Bearing in mind that this country is "small," which of the following events conceivably could cause the country to switch from being an importer of tricycles to an exporter of tricycles?

Correct AnswerverifiedShow Answer

Figure 9-8. On the diagram below, Q represents the quantity of cars and P represents the price of cars. -Refer to Figure 9-8. In the country for which the figure is drawn, total surplus with international trade in cars

Correct AnswerverifiedShow Answer

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